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Ml v Yj

Judgment Cited authorities 18 Cited in Precedent Map Related
Vincent
Judgment Date13 December 2010
Subject MatterFinal Appeal (Civil)
Judgement NumberFACV20/2009
CourtCourt of Final Appeal (Hong Kong)
FACV20/2009 ML v. YJ

FACV No. 20 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 20 OF 2009 (CIVIL)

(ON APPEAL FROM CACV NO. 89 OF 2008)

Between:

________________________

ML Petitioner
(Appellant)
- and -
YJ Respondent
(Respondent)
_____________________
Court : Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Litton NPJ and Sir Anthony Mason NPJ
Dates of Hearing: 16 - 17 November 2010
Date of Judgment: 13 December 2010

________________________

J U D G M E N T

________________________

Mr Justice Bokhary PJ :

1. I am proud as well as happy to agree with Mr Justice Chan PJ’s judgment in its entirety. Like him, I would restore the decision reached by Mr Justice Lam in the High Court, which decision has the support of Mrs Justice Le Pichon JA who presided and dissented in the Court of Appeal. I of course respect the views taken by those who see it differently from us. But the public policy consideration engaged is the fundamental one that our judiciary adjudicates unless there is good reason otherwise. And I am firmly of the opinion that in order to preserve the effectiveness of our legal system and to do justice according to law, there is one course and one course only to take. It is to withhold recognition of the Shenzhen decree and proceed with this case in Hong Kong. No matter how soon time proves that to be true, it will be too late for the wife (unless subsequent events provide – as Chief Justice Li for the Court put it in Government of HKSAR & Another v. Scott (2006) 9 HKCFAR 221 at p.222J – “wholly exceptional reasons” such as would persuade the Court to “re-open” this appeal).

Mr Justice Chan PJ:

2. This is an appeal by the wife (“the Wife”) in a matrimonial dispute. Two issues are raised for determination. First, whether the Divorce Order dissolving her marriage with the husband (“the Husband”) granted by the Shenzhen Intermediate People’s Court on 14 November 2007 which took effect on 14 December 2007 (“the Shenzhen Divorce”) should be recognized in Hong Kong. Second, if it is recognized, whether, notwithstanding such recognition, the Hong Kong Courts can still proceed with the Wife’s ancillary relief claim against the Husband which she had commenced in Hong Kong before the Shenzhen Divorce.

Background of the parties

3. Both the Husband and the Wife were born in the Mainland and are Chinese nationals. The Wife is a university graduate and worked initially as an English teacher. After changing to a textile factory and working there for a while, she started her own textile business. The Husband first worked as a public security officer in Shenzhen and later joined a state owned telecommunication company. They met in 1989 and got married in Shenzhen in 1992. The elder son was born in the same year.

4. The Husband then became a director and general manager of another state owned enterprise, China Motion Telecom Development Company. As the company expanded to Hong Kong, he came to work here in 1993. The operation in Hong Kong was carried out by a company called CM Telecom International Ltd (“CMTIL”) which was listed on the Hong Kong Stock Exchange in 1997 and the Husband became its Vice Chairman.

5. The Wife came to Hong Kong with the elder son in 1995 to join the Husband. After she came to Hong Kong, she still maintained her textile business. In 1999, the second son was born in Hong Kong. The children went to school here. In due course, they all acquired the right of abode as permanent residents.

6. The parties kept two matrimonial homes: one in Shenzhen and the other in Hong Kong. The Husband stayed more in Shenzhen since his responsibilities required him to spend more time in the Mainland. The Wife and their sons lived in Hong Kong but commuted between Shenzhen and Hong Kong during the weekends. The Wife ceased her textile business in 2000 to be a full-time housewife looking after the children.

7. In April 2004, the Husband left the telecommunication business and started to engage in real estate business both in Hong Kong and in Shenzhen. It is not disputed that when he left CMTIL, he was given substantial assets and his real estate business later turned out to be very successful.

8. The family enjoyed quite a high standard of living and had accumulated substantial wealth both in Shenzhen and in Hong Kong.

9. The marriage went wrong in 2002 when the Wife said she discovered that the Husband had an affair with another woman. In May 2004, the Wife suggested a divorce and the Husband agreed, but this was not implemented due to the objection of the elder son. However, on 23 March 2006, the Husband wrote to the Wife asking for a divorce. This apparently was agreeable to her.

History of the proceedings

10. On 18 May 2006, the Wife filed a petition for divorce in Hong Kong relying on misconduct on the part of the Husband and sought custody of the children and ancillary relief (“the Hong Kong proceedings”).

11. Two days later, the Husband issued a writ in the High Court against the Wife (“HCA 1088”) claiming declarations that she was holding the shares of five companies on trust for him. The Indorsement of Claim also sought injunctions to restrain the Wife from misappropriating, converting and/or misusing the assets and properties of these five companies and the sale proceeds of two properties (a unit on 9/F Union Park Centre and a flat in the Legend) and an account for the sale proceeds in respect of four other properties held in the name of the companies.

12. On 15 June 2006, the Husband filed a Form 4 indicating his intention to defend the petition and advanced claims for custody and ancillary relief. Both parties applied for interim custody of the children.

13. In HCA 1088, the parties reached an agreement for the net proceeds of the sale of two of the properties forming part of the subject matter of that action to be deposited in court by the Wife. Consent orders relating to the payments into court were made on 29 June 2006 and 14 July 2006. Pursuant to those orders, the Wife paid the net proceeds of sale into court amounting to $28.5 million.

14. On 2 August 2006, the parties filed their respective financial statements (Form E). In the Form E filed by the Husband, it is stated that the payment into court in HCA 1088 was made “pending the determination of the ancillary relief application in the divorce proceedings”. He disclosed on oath two properties in the Mainland and various assets, properties and companies in Hong Kong with total net assets amounting to more than HK$72 million.

15. On 3 August 2006, the Wife filed an application for ancillary relief, and also filed a notice of her intention to proceed with the application in the petition for a transfer of property order in respect of the Husband’s beneficial interest in two Hong Kong properties (“the Central Park property” and “the Waterloo Road property”) which were not the subject matter of HCA 1088 but which were disclosed in his Form E. The notice was registered in the Land Registry against those properties.

16. The petition was amended by consent on 9 August 2006 to water down the Wife’s allegations of misconduct. On 11 August 2006, the Wife issued an application for maintenance pending suit for herself and the children. The Husband subsequently filed another Form 4 on 10 August 2006 indicating that he would not defend the amended petition.

17. On 1 September 2006, a consent order for interim maintenance pending suit was made so that the Husband would pay the Wife and the children interim maintenance of HK$450,000 per month upon the parties entering into the consent summons in HCA 1088. This consent summons was filed on 7 September 2006 seeking an order for payment out of a sum that matched the interim maintenance ordered until further order. In a letter dated 6 September 2006 from the Wife’s solicitors to the court accompanying the consent summons, the Husband’s solicitors by countersigning on the letter confirmed that “both the Plaintiff and the Defendant agree that the 2 payments into court are part of the family assets”.

18. On 15 September 2006, interim custody of the younger son was granted to the Wife. No interim custody order was made regarding the elder son. The restriction on the elder son from leaving Hong Kong was discharged by order of Hartmann J on 29 December 2006.

19. On 23 October 2006, the Husband instituted the Shenzhen divorce proceedings (“the Shenzhen proceedings”). He also sought custody of the children and financial relief regarding the parties’ joint assets consisting only of eight Mainland properties and two Hong Kong properties amounting approximately to RMB 14.66 million. None of the assets, properties and companies disclosed in his Form E in the Hong Kong proceedings appeared in this Shenzhen document, apart from two Mainland properties and two Hong Kong properties.

20. The Wife was not informed of the Shenzhen proceedings until 13 November 2006, when the parties were supposed to attend a Financial Dispute Resolution (FDR) meeting. On that same day, a decree nisi of divorce was granted by consent in the Hong Kong proceedings.

21. On 23 November 2006, an order was made by consent to transfer the Hong Kong proceedings from the District Court to the High Court. When the Husband indicated in December 2006 that he would not withdraw the Shenzhen proceedings, the Wife applied in the Hong Kong court on 18 January 2007 for an anti-suit injunction and for interim relief pending the substantive hearing. Lam J refused interim relief at the hearing and adjourned the substantive hearing to 7 May 2007.

22. On 5 March 2007, on advice, the Wife withdrew the anti-suit...

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